GMA Adapts to Changing Consumer, Political Landscape

The Grocery Manufacturers Association gets around pretty well, for a 101-year-old. Despite relocating its annual GMA Executive Conference to Colorado Springs this year, after having to cancel its long-standing meeting at The Greenbrier resort in West Virginia last year, the trade group was expecting a strong turnout for the event, which is taking place this week. GMA has met or exceeded

WASHINGTON — The Grocery Manufacturers Association gets around pretty well, for a 101-year-old.

Despite relocating its annual GMA Executive Conference to Colorado Springs this year, after having to cancel its long-standing meeting at The Greenbrier resort in West Virginia last year, the trade group was expecting a strong turnout for the event, which is taking place this week.

GMA has “met or exceeded” its attendance goals for the conference, Pamela G. Bailey, president and chief executive officer of GMA, said in an interview with SN.

“That reinforces the importance of this meeting, the value of it and the strength of the program agenda,” she said.

This year's GMA Executive Conference — which draws top-level executives from manufacturers, distributors, retailers and others in the industry — will be the first for Bailey as president and CEO. She was named last December to succeed Cal Dooley, who left GMA about a year ago after a brief stint as CEO to join the American Chemistry Council.

In addition to adapting to the physical relocation of its main conference, GMA, which celebrated its 100-year anniversary last year, is also exhibiting its flexibility by adjusting to the changing political climate in Washington, Bailey explained.

She cited the group's success in the passage of food safety reform legislation in the House this year, and its leadership role in such pending legislative initiatives as climate change and chemical-handling regulations.

“We have a very full legislative agenda, and that reflects the activist nature of this president and this Congress,” Bailey told SN. “We have our hands full.”

This year's meeting also comes amid one of the worst economic recessions in the nation's history, but CPG companies appear to be weathering the storm.

A PricewaterhouseCoopers report issued earlier this year by GMA on the financial condition of packaged goods companies supported that premise, noting that CPG entities outperformed public companies overall in shareholder returns in 2008. These companies remain resilient by focusing on their well-known brands and delivering a value message to consumers, the report concludes.

Bailey said GMA members are well-positioned for the current downturn and beyond.

“We are confident we are going to come out of this stronger than ever,” she said. “That's because historically, this is an industry that understands how to listen to the consumer, and can adapt quickly to the needs of that consumer. We've seen an increased focus on value, and in some cases an increased focus on marketing to build brands.

“Also, historically this has been an industry that, when a recession ends, comes back much faster in terms of increased productivity and employee growth,” she added. “We are well-positioned to continue to be a strong contributor to the nation's economy and to deliver value to consumers.”

COLLABORATION KEY

Collaboration with retailers has become even more important in the weak economy, Bailey said, because of the opportunities to improve efficiencies in the supply chain and to work together to provide more value at the shelf.

To that end, GMA and its counterpart in the food retailing world, Food Marketing Institute, are also working together more closely than ever before. After unveiling a formal collaborative process back in January, GMA and FMI are scheduled to hold their second official Trading Partner Alliance meeting at the Executive Conference this week. There the associations will seek to approve a joint agenda for a comprehensive series of efforts under the TPA for 2010.

Among the initiatives on which the two associations have already been collaborating is the product-recall portal that also involves data standards group GS1. The portal, which is scheduled for a relaunch this fall but has been active since early this year, is meant as a means through which suppliers and retailers can quickly communicate information about product recalls.

“There have been a great many meetings on improving and expanding the portal, and it is going to benefit not only those who participate in it, but ultimately the consumer,” Bailey said.

In addition, FMI and GMA will combine several of their meetings next year, beginning with a joint supply chain conference in January.

Sustainability is one of the most intensive areas of collaboration between retailers and suppliers. In addition to discussions with FMI and with other retailers, GMA has also been working closely with the Consumer Goods Forum, a global trade group representing both retailers and suppliers, on developing sustainability measurement standards for the industry.

“We see a real interest among retailers and manufacturers for a common measurement process, and we are heavily involved in those discussions,” Bailey said.

Other examples of retail collaboration include efforts to combat childhood obesity, she explained.

“The work we do with retail partners and especially with FMI is unprecedented among trade associations,” Bailey said. “It is a unique strength of our industry broadly. We value it and we have really focused on strengthening what we do together with FMI this year, and we are strengthening the plans we are looking at for 2010.”

CLIMATE AND CHEMICALS

GMA counts as a success its work in helping shape the food safety legislation that passed the House this year, but some issues still loom large as the legislative calendar for 2010 winds down.

A climate-change bill that passed the House and is now being considered in the Senate is unfavorable to the food industry, Bailey explained, because of what she described as an unfair allocation of carbon offsets for the fuel-intensive food industry.

“This is an industry that is absolutely committed to, and has already built a record of, reducing carbon emissions and conserving resources, so we are in support of the necessity for such legislation,” she said. “The issue is going to be how the carbon offsets are distributed. The bill that came out of the House did not take into account the disproportionate impact on the food and beverage sector.”

Food and beverage companies have the fourth-largest exposure to carbon costs of any industry, Bailey noted.

She said GMA plans to work closely with the Senate to make sure allowances are distributed proportionately to each industry's emissions.

GMA also anticipates action in the House and possibly the Senate on chemical management legislation.

“Laws that govern how we manage chemicals in this country are nearly 40 years old and have not been updated since they were first passed in the '70s,” Bailey explained. “We support the reform of those policies through the [Environmental Protection Agency], but we want to make sure that CPG companies are involved in that reform.”

GMA is working with a coalition of other CPG and chemical groups on proposals for regulatory changes.

In addition to the chemical legislation and the climate-change bill, the Senate also has yet to pass its version of the food safety legislation [4].

Also on the horizon for the coming months are further announcements about GMA's work with schools to encourage exercise as part of its efforts in the realm of health, nutrition and childhood obesity.

In addition, GMA is working with consulting firm A.T. Kearney on a strategy to better communicate the industry's role in the economy and in people's lives.

“We think we have a role to tell that story more broadly, and we have some thoughts about how we are going to do that,” Bailey said.